In ordinary circumstances, estate planning is a critical step to take when considering how to protect your family and your property. In the event that you pass away, you want to know that your family will get what they deserve; that any business dealings you have will go the way you want; that your children, if still minors, will get the care they need. But do the details of estate planning change when circumstances change, say, when you live abroad?
Yes, but the situation is often complicated. In fact, a single blog post can’t possibly cover all aspects of this complex problem. However, we will try to go over some of the basics so that you can get an idea about how living abroad might affect your estate planning efforts.
Let’s start with an example.
Tony lives in the U.K. with his wife and two kids. Tony, an American, and his wife, Gloria, who is English, both have assets and savings in the U.S. and the U.K. If something should happen to either or both of them, the taxes and legal outcomes could cause serious harm to their legacy.
As estate planning attorneys, we help people like Tony and Gloria make sure that their money and property located in America go to the right people (probate) and that their estates pay as little tax as possible.
Estate Planning and Probate
The problem that often arises concerning probate for those overseas depends on where you live, where your assets are located, and your citizenship. Because many countries have laws in place (forced heirship laws) that split the estate of a deceased person by percentages between family members, it’s possible that your estate doesn’t need any protection. This is, however, not the case most of the time and for many countries. Every person who needs an estate plan has different needs concerning probate, but there are a few general guidelines that might help.
To avoid forced heirship laws, you can either avoid owning any assets abroad, or you can own them in a way that overrides those laws—for example, by placing them in a trust or by owning them through joint tenancy.
Estate Planning and Taxes
Some of the biggest obstacles that Americans living abroad need to be aware of are the transfer taxes that can greatly affect their heirs’ inheritance. These include real estate transfers, wealth transfers, and other property transfers. Even if you no longer live in the United States, you are still subject to these taxes if you have assets here and do not have a plan in place. These taxes also can vary widely from state to state, which is the reason it is important to find a local attorney to handle your case.
Are you ready to start planning for your family’s future? If you or a family member are living outside of the U.S., give Casal & Moreno a call at 786-465-6728.